India has significantly changed the way businesses are established and run since the introduction of the Goods and Services Tax (GST). You must have a turnover of over *40/20 lakh to qualify for GST registration. GST registration is only applicable to businesses that offer products and services across state lines or via an e-commerce platform. Startups are required to file for GST.
Known as the Goods and Services Tax (GST), this tax eliminates certain indirect taxes and consolidates everything under one, broader roof. Its “One Nation, One Tax” slogan was implemented to simplify compliance procedures for businesses, particularly startups.
Examine how the Goods and Services Tax (GST) has affected entrepreneurs and whether there is any new GST status requirements that startups must adhere to. According to the type of goods and services sold, the tax rate ranges from 0% to 28%.
How soon will India’s GST registration become mandatory?
Following situations require GST registration in India;
- Every taxpayer with a yearly turnover of more than *40 lakhs must register again for GST
- You must register for GST if you want to sell goods and services at events or exhibitions that don’t require you to have an office. Dealers subject to such taxes must pay GST based on 90-day estimates of sales. GST Registration status is temporary for 90 days.
- Non-resident Indians (NRIs) who intend to launch a business in India will have to register for GST registration. The new status is valid for 90 days after it has been established.
- All input service distributors who wish to be able to carry forward the benefits of the input tax credit must register for GST.
- In order to use the reverse charge system, businesses must register for GST
There has been an increase in the GST Registration Barrier
Prior to the introduction of the Goods and Services Tax (GST), businesses making more than $5 lakh a year had to pay taxes. Those companies with yearly sales of over *40 lakhs are required to register. A service provider may register up to a maximum of ₹20 lakhs.
The increase in GST threshold has provided benefits to small businesses, especially startups in India.
GST in India also has a composition system for small businesses. Companies that have annual sales of less than *1.5 crores will have their tax rate lowered under this plan.
Tax credits are available for purchases
In India, service startups make up a sizable share of the startup ecosystem. Prior to introduction of the GST, they had to collect and pay service tax to the Government. It was feared that VAT paid on corporate purchases would not be well utilized. Obviously, you couldn’t deduct state VAT from service tax.
Thanks to the Goods and Services Tax (GST), the problem has been solved. During the first year of operation, startups may deduct the GST tax they pay on their purchases (such as office supplies) from their sales taxes.
Is GST Registration Necessary?
GST registration gives businesses many benefits, including being recognized as legitimate businesses and keeping the company legally up-to-date. The following benefits come with GST registration:
- By registering for income tax, you’ll be better able to compete with your unregistered competitors
- A GSTIN number is required before selling goods or services on any e-commerce site, including Flipkart, Amazon, Paytm, Shopify, etc.
- Input tax credits, which allow GST holders to save money on purchases, are available only to registered GST holders.
- It is not prohibited to sell in India
- A GSTIN is essential for cross-state trade. Only GST-registered firms are able to provide it. In certain circumstances, a GSTIN number is required to apply for government tenders. When GST is not adopted in India, you will miss out on a business opportunity
What is the purpose of a GSTIN number?
In short, GSTIN stands for Goods and Service Tax Identification Number. Approximately 15 letters and numbers comprise the number. It is created by the Government after successful GST registration.
What is the procedure for registering and filing taxes?
The procedure for submitting paperwork and getting an identification number no longer requires people to hurry from one tax office to another. Online GST registration and return filing is fast and straightforward. With the right paperwork readily available, a registration number can be obtained in seconds.
A financial windfall awaits startups strapped for cash with the Goods and Services Tax (GST). The Goods and Services Tax (GST) that was introduced in India last month gave startups a much-needed break.
GST Documents Required for Registration
Documents required to register for GST are listed below.
- An individual’s PAN card is linked with the person’s or business’s PAN card: – The GSTIN is the same as the PAN number. For a GST certificate, a PAN is required
- Persons who start a business need to prove their identity and address with documents including a PAN card, passport, driving license, or voter ID card
- A valid address must be provided if you’re applying for GST. It could be a rent agreement, a sale agreement, an electricity bill or the latest property tax receipt or municipal khata
- Proof of Bank Account: If you want to open your own business, you’ll need to show proof of your bank account. Scan the first page of your bank passbook, which includes a few transactions and your business’s address and can be used to verify GST status.
Is it possible to streamline the billing process for small businesses?
Invoices can be easily generated by a product that is GST-compliant in minutes
- With the platform’s intuitive design, making an invoice by creating multiple invoices is easy. A value and GST amount must be entered. The information about the products or services must be provided. After you click the “Create Invoice” button, the forum will create an invoice for you automatically
- A GST-compliant invoice can be sent via SMS or email to your clients with a unique link.
- Following that, your clients can go ahead and make the payment. The funds will be transferred to your account as soon as they are received. You offer the option for your customers to download and save the invoice for their records. Keeping your business procedures up to date is even easier when you pay an invoice in advance.
The site also offers consumer information, such as the GST status of a customer’s bills and how quickly they were paid.